Construction remains the most dangerous industry in terms of health and safety, contributing to almost a quarter of all work-related deaths in 2021/22, according to the UK Health and Safety Executive (HSE). More positively, fatal injury rates are falling post-pandemic, unlike in earlier years, when they remained stable. The industry also has the second-highest level of workplace injuries.
Every injury and fatality is a tragedy, many of which could easily be avoided, often highlighted in the feedback when the HSE issues a fine.
The industry is very labour-intensive, requiring permits from public officials associated with high-value contracts to purchase expertise and building materials. This heightens compliance risks across a number of areas beyond safety.
Key Construction Compliance Risks
We have identified five key regulatory training areas that construction companies need to pay closer attention to because of the increased levels of risk.
1. Building & Environmental
Training employees on pertinent building regulations is essential to ensure they comprehend the stipulations for designing, constructing, and renovating projects, which include adhering to fire safety measures, maintaining structural integrity, and meeting energy performance standards.
Protecting the Environment
Nowadays, there is a bigger focus than ever on business's impact on the environment, highlighted by the Considerate Constructors Scheme.
The Environmental Protection Act 1990 is the main legislation governing environmental protection in the UK. The Act places a duty of care on businesses to prevent pollution and protect the environment. Contractors must comply with all applicable environmental regulations, including waste disposal, noise and air pollution.
Employees need training on waste management practices, pollution prevention measures, environmental impact assessments, and the safe handling and disposal of hazardous substances to ensure compliance with environmental regulations.
2. Health & Safety
Working in construction is a more dangerous occupation than most. Workers may be using dangerous equipment, surrounded by heavy machinery, large vehicles and working at heights.
Employees should be trained on their obligations under a number of health and safety regulations. Including the requirement to carry out risk assessments, develop construction phase plans, coordinate with other duty holders, and ensure the health and safety of workers.
Here is a summary of some of the key areas of legislation:
- Health and Safety at Work Act 1974
This is the main legislation governing health and safety in the UK. The Act places a duty of care on employers to ensure the safety of their employees and others who may be affected by their work. Contractors must comply with all applicable health and safety regulations, including scaffolding, fall protection, and electrical safety.
- Construction (Design and Management) Regulations 2015
The CDM Regulations 2015 are a set of regulations designed to improve safety on construction sites. Contractors must comply with CDM regulations, including appointing a CDM coordinator, carrying out risk assessments, and providing information to workers.
- Control of Substances Hazardous to Health (COSHH) Regulations
COSHH regulations require employers to control or eliminate employees' exposure to hazardous substances, including chemicals, fumes, dust, and biological agents. This involves providing PPE, safe handling and storage practices, and adequate training on associated risks.
- Work at Height Regulations
Employers must comply with the Work at Height Regulations 2005, which require proper planning, competent workers, appropriate equipment, and measures to prevent falls. Training staff on these regulations is crucial so they understand their responsibilities and avoid serious injury, death, or legal consequences.
- Personal Protective Equipment at Work Regulations 1992
This set of health and safety regulations in the United Kingdom requires employers to provide personal protective equipment (PPE) to their employees where there are risks to their health and safety that cannot be adequately controlled by other means. Employees who work in construction may need to wear safety helmets, safety glasses, and safety gloves.
- Construction Industry Scheme (CIS)
Under the CIS, contractors must deduct tax and National Insurance contributions from payments made to subcontractors. The tax deducted depends on registration. Registered subcontractors pay 20% tax, while unregistered subcontractors pay 30% tax. The scheme is designed to ensure that tax is paid on construction work in a timely manner and reduce the risk of tax evasion.
Due to the extensive use of contract and casual labour in the construction industry, it is crucial to guarantee that employees have the legal right to work in the UK and are not subjected to exploitation.
To ensure employees understand their rights and responsibilities, staff need training on relevant employment legislation, including the Equality Act 2010 and Working Time Regulations. That includes fair recruitment practices, equal opportunities, and anti-discrimination policies.
Hiring managers may need additional training to conduct right-to-work checks to ensure all employees have the legal right to work in the UK.
The construction industry is particularly vulnerable to modern slavery because it is often characterized by long hours, low pay, and dangerous working conditions.
It is crucial for all employees to receive training on modern slavery and its various forms, such as forced labour, human trafficking and debt bondage.
They should learn to recognise the signs of potential exploitation and the various sectors and industries where it commonly occurs, including construction.
Data protection is a critical issue in the construction industry. Construction companies collect and process a vast amount of personal data, including the data of employees, clients, subcontractors, and suppliers.
Training employees on data protection and compliance with the General Data Protection Regulation (GDPR) is crucial.
This includes training on the lawful processing of personal data, data security measures, consent requirements, and individual rights regarding personal data.
4. Financial Crimes
Building projects rely on securing building permissions, winning bids, and procuring needed materials. This creates an increased risk of financial crimes.
Bribery & Corruption
Corruption is a serious problem in the construction industry. It can lead to higher costs, lower quality, and unsafe working conditions.
Common types of bribery and corruption include:
- Bribery of public officials happens when a contractor or subcontractor pays a bribe to a public official to win a contract or get preferential treatment.
- Bribery of private individuals happens when a contractor or subcontractor pays a bribe to a private individual to win a contract or get preferential treatment.
- Kickbacks are when a contractor or subcontractor pays a kickback to a public official or private individual in exchange for money or other benefits.
Construction companies should provide training on anti-bribery and corruption policies and compliance with the UK Bribery Act 2010.
This training helps employees understand the prohibitions on offering or accepting bribes, the importance of ethical business practices, and the consequences of non-compliance.
Fraud is a serious problem in the construction industry. It can cost businesses and taxpayers billions of pounds each year. Common types of fraud include:
- Bid rigging is when a group of contractors agree to submit artificially low bids to win a contract.
- Overcharging is when a contractor charges more for materials or services than they are worth.
- False billing is when a contractor submits invoices for work that was not done or materials that were not supplied.
- Change order fraud occurs when a contractor submits change orders for work that was not authorized or for work that was not necessary.
- Ghost workers are those who did not work on a project, yet a contractor submits invoices for them.
- Subcontractor fraud occurs when a contractor hires subcontractors who are not qualified to do the work or do not have the proper insurance.
- Theft of materials, equipment, or tools.
Fraud training helps raise awareness of common fraudulent schemes and red flags, enabling staff to promptly identify potential fraudulent activities and report any suspicions.
Contractors in the construction industry are no strangers to legal battles, with various claims such as negligence, breach of contract, and product liability being commonplace.
In addition to regulatory obligations relating to health and safety, environmental protection, and employment law, other common legal issues exist.
- Contract disputes are one of the most common legal issues in construction. These disputes can arise from various factors, such as changes to the scope of work, delays, or defects in the work.
- Litigation is another common legal issue in construction. It may involve disputes between contractors, subcontractors, owners, or other stakeholders.
- Liability is a major concern for those involved in construction. This can include liability for worker injuries, property damage, or work defects.
- Permits from local governments are often necessary before beginning construction. These permits can be complex and time-consuming to obtain.
- Insurance is essential for those involved in construction. It can protect against various risks, such as liability, property damage, and injuries.
Many of these legal issues can easily be mitigated by ensuring due diligence regarding suppliers and relevant compliance training for staff.
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